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Main U.S. indexes pare losses; Nasdaq now ~flat
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Energy weakest S&P 500 sector; comm svcs leads gainers
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Euro STOXX 600 index up ~0.5%
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Dollar ~flat; crude, gold, bitcoin dip
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U.S. 10-Year Treasury yield steadies at ~3.28%
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WITH PAST DATA RESTATED, THE LABOR MARKET PICTURE DIMS (1135 EDT/1535 GMT) Investors are nearing the end of a holiday-shortened week that was packed to the gills with not-so-sunny economic data.
They can now add jobless claims and Challenger layoffs to the pile. Last week, 228,000 American workers filed first-time applications for unemployment benefits , surprising consensus to the upside by 28,000. Not only that, but because of the Labor Department updating its seasonal adjustment factors, revising data back to 2018, the previous week's number was drastically restated - 24.2% higher - to 246,000 from 198,000. "The new data for the past two months show a much higher level of claims and a rising trend," says Ian Shepherdson, chief economist at Pantheon Macroeconomics. "The four-week average now stands at 231K, the highest since February 2022." With these adjustments, however, initial claims actually fell by 7.3% last week. The series now suggests the Fed's restrictive monetary policy is working its dark magic on the erstwhile tight labor market, and provides evidence that the rash of layoff announcements - particularly from the tech-plush sectors - are beginning to be felt. A rising trend in claims has been a key missing part of the labor market story, but it is now clear layoffs are increasing, while other data - notably the NFIB survey - point to much slower gross hiring.
Ongoing claims , reported on a one-week lag, were also upwardly revised. Last week's number was restated 7.6% higher, with today's print posting a modest 0.3% increase to 1.823 million. That number is 7.3% higher than analysts expected and well above the 1.7 million pre-pandemic level. "Looking ahead, the surge in layoff announcements captured in the Challenger survey points clearly to much higher jobless claims over the next few months," Shepherdson adds.
Thanks for the tidy segue, Mr. Shepherdson. Planned layoffs , U.S. companies announced 89,703 job cuts in March, according to executive outplacement firm Challenger, Gray & Christmas (CGC). That figure is 15% higher than the February reading - representing the third consecutive monthly gain - and is 319% higher year-on-year. "We know companies are approaching 2023 with caution, though the economy is still creating jobs," said Andrew Challenger, CGC's senior vice president. "With rate hikes continuing and companies’ reigning in costs, the large-scale layoffs we are seeing will likely continue." The technology sector was responsible for 38% of last month's announced job cuts. In the first quarter of this year, tech layoffs tallied 102,391, up a whopping 38,487% from the first three months of 2022. There were more first-quarter tech layoffs than in the next four hardest-hit sectors combined - financial, healthcare, retail and services. Investors now look to tomorrow's employment report, which is expected to show the economy added 239,000 jobs in March while the unemployment rate held firm at 3.6%.
But they will have to sit tight until Monday's opening bell to see how the stock market takes it, as the report falls on a market holiday.
(Stephen Culp)
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U.S. STOCKS SLIP ON MORE WEAK DATA (1015 EDT/1415 GMT) Wall Street's main indexes are down, but well off their early lows on Thursday as a worse-than-expected weekly jobless claims report pointed to growing signs that rapid interest rate hikes by the Federal Reserve was slowing down economic growth. That said, the DJI , which is off the most among the main indexes, is only down around 0.2%. Additionally, industrials are actually among those S&P 500 sectors posting a rise on the day.
Bank stocks , transports , and small caps are also in positive territory. Meanwhile, the U.S. 10-Year Treasury yield , at just over 3.29%, is on track to end its six-day losing streak if it finishes above 3.2870%. The current six day losing streak is its longest run of lower closes since a 13-day slide during the February-March 2020 pandemic panic.
Here is a snapshot of where markets stood around 45 minutes into the trading day:
(Terence Gabriel)
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NASDAQ COMPOSITE: ENOUGH THRUST OR BUST? (0902 EDT/1302 GMT) The Nasdaq Composite may have bumped up against a ceiling on the charts as it neared resistance at its September 2022 high. Indeed, with its 1.8% loss so far this week, the tech-laden index's three-week win streak is at risk. And now, after the latest jobless claims data came in worse than expected, e-mini-Nasdaq 100 futures are suggesting the Composite is poised to come under further pressure at the open.
That said, one measure of the Nasdaq's internal strength, on a monthly basis, still suggests that the IXIC may have enough thrust to ultimately see a greater advance:
The Nasdaq New High/New Low (NH/NL) index, on a monthly basis, bottomed in October at 14.5%. It crossed back over its descending 10-month moving average (MMA) in January, and has now improved to 30.8%, which is its highest level since April of last year. With this, the measure's six-month rate-of-change is currently the third strongest reading coming out of a trough since the mid-1990s. Only the upturns out of its 2003 and 2009 troughs were stronger. This measure certainly has a lot of room to rise before reaching previous peaks. And even then, in a number of instances, including its most recent top in 2021, the Nasdaq moved still higher, while the NH/NL index, on a monthly basis, diverged. It's still early in April, but bulls will want to see this measure continue to trend higher.
A down-tick would be a concern, and a break below its 10-MMA, which has now risen to 21.2%, could see it threaten its lows again.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
